Is our education and training system an `engine` for economic growth?

By Masozi Nyirenda

12th June 2012

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On Wednesday 6th June 2012, Tanzania Professionals Network (TPN) organized a one day National Economic Forum (NEF), which was held at the National Museum Theatre in Dar es Salaam. The main theme of the Forum was ‘Building the Sustainable future of Tanzania "Changing the way of doing things"

According to the President of TPN, Mzalendo Phares Magessa, the aim of the Forum was to bring together professionals from various fields to discuss various issues relating to our economy. TPN aimed at collecting ideas and recommendations from professionals so as to put effective strategies to utilize these ideas and recommendations to do lobbying and advocacy to policy and decision makers to adhere to professionals’ recommendations in the process of improving our current and future national economic budgets, policies and plans. It was deemed that professionals have a role to play to support economic and social development of our nation.

I had an opportunity of attending and presented a paper titled ‘Is our education and training system an “engine” for economic growth?’ In this article I am going to provide a summary of what I presented.

Education and Training is a transmission of knowledge, skills, competencies, values, customs, morals, and ways of life of a certain society from its one generation to another, as a result of the teaching of vocational or practical skills and knowledge. Education and training skills can be obtained in Formal- schooling with formal curriculum; non-formal; and informal ways.

The major aim of education and training is to improve capability, capacity, performance and conducts that are accepted by the society and can help improve individual and society’s productivity and survival. These two terms are inseparable.

Education and training process is expected to bear the following results which are: change of behavior, attitudes, ways of doing things/ thinking, act (i.e. this is what we call learning/ acquiring).

There is a close link between education and training and the economy. Here are some arguments from famous scholars: Early Greek and Roman Philosophers such as Socrates and Plato saw education as the instrument to be utilized in shaping the youth to be thoughtful (critical thinkers/innovative) citizens who would serve the state.

Adam Smith, who is the founder of Economics as a discipline in his writing, about 1776, saw education as important in eliminating inefficiency and corruption and, thereby, creating morally upright citizens who would facilitate cultivating good government characterized by social and economic advancement.

Mwalimu Julius Nyerere once argued that in order for a country to progress we need four things: quality human capital which is literate, skilled, moral, and knowledgeable; land and its resources; good policies; and good, accountable and pro-people leadership. Nyerere pronounced the three enemies as ignorance (illiteracy, unskilful, less knowledgeable), diseases and poverty. He argued that through education people will become aware of their environment, their situation and utilise their resources to bring about economic growth hence fight diseases and poverty.

Main arguments on investment in education and training are based on Human Capital Theory. Human capital was generally defined into five categories namely: health status, on the job training, formal education, adult study programs; and migration to find better job opportunities. The theory emphasise that many skills and capabilities can be acquired by learning outside of tradition or formal education, or outside of schooling altogether.

The changes in world economies brought by globalization has influenced economies of all countries, Tanzania has not been spared. The global economies are increasingly based on knowledge and information. Knowledge is now recognised as the driver of productivity and economic growth, leading to a new focus on the role of information, technology and learning in economic performance.

Employment in the information and knowledge-based economy is characterised by increasing demand for more literate and highly-skilled workers, who are also enjoying wage premiums. The retention of employees will most probably be based on their skills and knowledge that can create advantages for the company over its competitors.

Education and training provides the following to individuals, which are essentials for enhancing productivity: freedom and confidence; more earnings; possibilities to be employed/self-employment; it’s pedagogy of the oppressed: to emancipate themselves from physical and mental slavery; help individuals to have liberated mind: open minded to new ideas & thinking; develop free individuals and create many sided human beings if revolved around people’s lives and not only organized mainly around work and the production of commodities; literacy skills: reading, writing and arithmetic skills.

Other benefits of education and training are it stimulate talents, creativity, innovations, critical thinking; build work skills which bring about productivity and economic growth; promote improved health status: for adults (especially for women) and children. Better education results in better heath for mothers and children due to better access to crucial information and health care.

A rise in human capital boosts the return on physical capital: i.e. Interlink between human capital and physical capital: equipping unskilled workers with ever more complicated and more expensive machines does not necessarily boost output. In fact, output might rise more significantly if the additional money were spent effectively and efficiently on more human capital instead of more physical capital.

Human capital raises national income: In 1998, Robert Lucas modeled the link between human capital and economic activity by splitting the economy into two sectors: the education sector produces new human capital with the help of existing human capital (teachers), while the final goods sector uses both human and physical capital as inputs. In this model a rise in human capital leads to rise in national income, while a high level of human capital explains a high level of income. Economic policy that raises the rate of growth of human capital will lead to higher growth rates of GDP.

My analysis will be based on the Southeast Asian Economic Growth Model, because in 1960s, most countries in Southeast Asia were average much poorer than African countries; however, by 2005, they were almost two and half times richer than African countries. What did they do to reach there?

The following are some important pre conditions for education to support economic growth, which were used by most Southeast Asian countries. They:

(a) Invested more in vocational education and training: many countries, including Malaysia and Indonesia, had made remarkable strides towards development of their countries because they had heavily invested in vocational education training. Do we need mass university graduates? We need more middle cadre (certificates, diplomas, advance diplomas) professions;

(b) Invested a reasonable amount of GDP into education and training: South Korea has given top priority to education for decades. It spends more than 8% of GDP on education, same in most South Asian countries;

(c) Foundations laid in kindergarten: because their long lags between education reform and GDP growth. Decades can pass before these traditional highly skilled workers enter the labour market;

(d) Lifelong learning was crucial: - further education and training on the job, in courses and seminars allows people to keep their human capital up to date and replace depreciation of knowledge. US spends 2% of GDP each year on training;

(e) Strong political will: Most of Southeast Asian countries succeeded because these countries gave a clear political priority to boosting human capital and practically followed a long-term strategy.

Tanzania has developed many macro and micro policies which aim at improving our economy. Education and training in Tanzania has achieved a lot since independence. I commend the ministry and all stakeholders including civil societies and development partners for playing their part. Such few achievements are:

(a) Increased enrolment at different levels of education: For example, Tanzania has primary enrolment ratio of above 90% reaching a total of a total of 8,419,305 pupils by 2011 from 8,316,925 pupils in 2007. Total enrolment in secondary education reached a total of 1,638,699 in 2010, a total enrolment in higher education reached 118,951; while in Teachers colleges enrolment rose from 23,403 students in 2007 to 37,698 students in 2011 (BEST, 2011);

(b) Increased numbers of avenues to obtain education and training: more education and training centres have been opened- e.g. ward secondary schools, UDOM,VETA;

Our education system is facing many challenges. The challenges can hinder education and training system not to accomplish its role of being an ‘engine’ of economic growth. Such challenges are:

(a) Frequent changes in the curriculum especially in basic education: There have been frequent changes in the curriculum nearly every time the Ministry of Education gets a new minister. Since independence the ministry has been led by nearly 17 ministers. Every one of them bringing in their own strategies which are different from their predecessors. This tendency has lowered productivity and slowed down continuity of previous programmes, which resulted into the inefficiencies we see today;

(b) Curriculum assessment & Quality Assurance systems: Many of us have tried to find out “what are aims of examinations?” many of these examinations at different levels of education and training aimed at sifting and certification of those who continues to another level and those who are left behind; and mainly measures the level of memorization hence force many students to “cram” notes and reproduces as they are. Other learning domains such as affective and psychomotor are not measures. This does not provide skills and knowledge for productivity.

(c) Poor quality of output and outcome at all levels of education: Mass failure in examinations & poor quality of graduates: 2010: Form IV examinations: Passed-Division I-III: 11.41%; Division IV & O: 88.59%; Pass rate dropped from 72.5% in 2009 to 50.2% in 2010; Dropping of Form II examination pass rate from 65.3% in 2009 to 61.8% in 2010

(d) Inadequate funding of education and training: recently, Hakielimu issued a statement about this. It says in 2010/2011 SEDP II was allocated TShs68.96 billion instead of planned TShs127.39 Billion. This is a deficit of TShs.58.44 Billion. In 2011/12, allocated TShs.74.7 Billion for development projects instead of TShs.135.39 billion requested. Generally, the government has been allocating an average of 50% of the education development budget

Currently, education funding depends heavily on grants and loans from development partners including World Bank. Many donor countries face economic crises; therefore it is likely their support will be dwindling each year.

The experience in the past years has shown that most donor countries do not provide all the funds they promised, while some do not provide at all though they promised. E.g. In 2008/09, MoEVT budget donors contributed only 43% of what they had promised; 2009/10 they contributed only 48 percent of what they promised (Haki elimu, 2012).

(e) Low utilization of research for economic growth: There is lack of effective system which will enable to identify and utilize results from research in different fields for economic growth.

(f) Vocation education and training has not expanded enough to reach majority and meet needs of job market.

Despite having macro and micro policies in place, we have observed that the major problem in our education and training system lies in effective implementation and funding of policies. There are many issues and recommendations which I have not been able to address. I hope this article is going to stimulate public debate on this issue.